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The major currency pairs:

EUR/USD

USD/JPY

USD/CHF

GBP/USD

The commodity currency pairs:

AUD/USD

NZD/USD

USD/CAD

Major Currency Pairs Personalities

EUR/USD

The most recent Bank for International Settlements (BIS) survey shows that the EUR/USD with 28% of the total dailyvolume is the most traded currency pair on the forex market. The EUR/USD tends to be negatively correlated to theUSD/CHF and positively to the GBP/USD. (see weekly charts)

Character is t ics

Average broker spread: 2-3 pipsDaily range average : 90-100 pipsBest time to trade: Euro Session (0700 GMT - 1700 GMT)Some factors affecting the EUR/USD rate:

The interest rate differential between the European Bank(ECB) and the Federal Reserve(FED)

Dollar strongness drives EUR/USD lower

FED intervention to weaken the dollar the sends EUR/USD higher

Trading the EUR/USD

Trading Experience: New and Advanced currency tradersTrading Style: Day trading and Swing trading

How to trade?

1) Applying Technical Analysis and/or Analyzing Fundamental News from the Euro and US zone to make EUR/USD

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trading decisions. Breaking strong psychological levels (1.3000, 1.2000,..) and/or surprising economic news releasescan make the EUR/USD move a lot in one direction without much retracements.

2) Since the EUR/USD pair tends to be negatively correlated to the USD/CHF, it is always a good idea to compareboth EUR/USD and USD/CHF charts in order to predict future moves, if USD/CHF breaks above an importantresistance level and EUR/USD didn't break support level yet, the EUR/USD is very likely to break below support level.This also illustrates how USD/CHF tends to lead the move ahead of EUR/USD.

USD/JPY

The most recent Bank for International Settlements (BIS) survey shows that the USD/JPY with 17% of total dailyvolume is the second most traded major currency pair.

Character is t ics

Average broker spread: 2-4 pipsDaily range average : 80-90 pipsBest time to trade: Asian Session (2400 GMT - 0900 GMT)Some factors affecting the USD/JPY rate:

The interest rate differential between the Bank of Japan(BoJ) and the Federal Reserve Japanese government intervention to strengthen their currency sends USD/JPY lower

Trading the USD/JPY

Trading Experience: New and Advanced currency tradersTrading Style: Day trading and Swing trading

How to trade?

Applying Technical Analysis and/or Analyzing Fundamental News from the Asian zone to make USD/JPY tradingdecisions. Breakouts are often true and sustained ones.

GBP/USD

The most recent Bank for International Settlements(BIS) survey shows that the GBP/USD with 14% of total dailyvolume is the third most traded major currency pair. The GBP/USD is one of the most volatile currency pairsgenerating many false breakouts and wild movements, therefore, it is not recommend to start trading this pair unlessyou are a very experienced currency trader.

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Character is t ics

Average broker spread: 4-5 pipsDaily range average : 150-200 pipsBest time to trade: Euro Session (0700 GMT - 1700 GMT)Some factors affecting the GBP/USD rate:

The interest rate differential between the Bank of England(BoE) and the Federal Reserve

High yield and attractive growth in the UK drives GBP/USD higher

Trading th e GBP/USD

Trading Experience: Expert currency tradersTrading Style: Day trading and Swing trading

How to trade?

Applying Technical Analysis and/or Analyzing Fundamental News from the UK and US zone to make GBP/USDtrading decisions. Watch out for false break outs! Surprising economic news releases can make the GBP/USD move

a lot in one direction without much retracements.

USD/CHF

The most recent Bank for International Settlements (BIS) survey shows that the USD/CHF with 4% of total dailyvolume is the least liquid traded major currency pair. The USD/CHF tends to be negatively correlated to theEUR/USD.

Character is t ics

Average broker spread: 4-5 pipsDaily range average : 120-135 pips

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Best time to trade: Euro Session (0700 GMT - 1700 GMT)Factors affecting the USD/CHF rate:

Global stability and global recovery will send USD/CHF higher

USD/CHF rallies on geopolitical instability

Trading the USD/CHF

Trading Experience: Moderate and Advanced currency traders

Trading Style: Day trading and Swing trading

How to trade?

1) Applying Technical Analysis Analyzing Fundamental News from the CHF and US zone to make USD/CHF trading

decisions.

2) Since the USD/CHF pair tends to be negatively correlated to the EUR/USD, it is always a good idea to compareboth EUR/USD and USD/CHF charts in order to predict future moves, if EUR/USD breaks above an important

resistance level and USD/CHF didn't break support level yet, the USD/CHF is very likely to break below support level.

This also illustrates how EUR/USD tends to lead the move ahead of USD/CHF.

The Commodity PairsWritten by Jimmy Yung

The three currency pairs that have the highest correlations with commodities are the Canadian dollar (CAD),Australian dollar(AUD), and the New Zealand dollar(NZD). Highly correlated to rising and falling gold prices are theAUD/USD and NZD/USD currency pairs, the single biggest beneficiary of rising oil prices is the USD/CAD.

When making trading decisions in the commodity pairs, it might be a good idea to take a look at the correlatedcommodities because it can help to predict future up or down movements. For example, If you think gold will keeprising, it might be a good strategy to buy the Australian dollar since it's 80% positive correlation to gold.

Commodity Pairs Analysis

AUD/USD ( Australian dollar / U.S. dollar )

Because Australia is the world's third largest exporter of gold, the Australian dollar has an 80% positive correlationwith this metal. If you believe the price of gold will continue to increase, you could favor a commodity-based economylike Australia because if gold rises, the Australian Dollar is very likely to follow it's lead.

Trading Ideas

1) If you think Gold will keep rising, it might be a good strategy to buy the Australian dollar because it's 80% positivecorrelation to Gold.

2) Since the AUD/USD pair tends to be highly correlated to gold, it might be a good idea to compare both AUD/USDand gold charts in order to predict future moves, if for example gold breaks above an important resistance level and

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AUD/USD didn't break resistance level yet, the AUD/USD is very likely to break above also. This illustrates how goldtends to lead the move ahead of the Australian dollar.

Below ch arts i l lust rate the high correlat ion between the Austral ian dol lar and Gold.

NZD/USD(New Zealand dollar / U.S. dollar)

The health of New Zealand's economy is closely tied to the health of the Australian economy. This explains why theNew Zealand dollar and the Australian dollar have had a 92% positive correlation over the past four years (2003-2006). The New Zealand dollar has an even stronger correlation with gold than the AUD/USD does - the correlationhas been approximately 88% over the past three years. If you believe the price of gold will continue to increase, youcould favor a commodity-based economy like New Zealand because if gold rises, the New Zealand dollar is overlylikely to follow it's lead.

Trading Ideas

1) If you think gold will keep rising, it might be a good strategy to buy the New Zealand dollar because it's 85%positive correlation to gold over the past years.

2) Since the NZD/USD pair tends to be highly correlated to gold (together with the AUD/USD), it might be a good ideato compare both NZD/USD and gold charts in order to predict future moves in the New Zealand dollar, if for examplegold breaks above an important resistance level and NZD/USD didn't break resistance level yet, the NZD/USD is verylikely to break above also. This illustrates how gold tends to lead the move ahead of NZD/USD.

NZD/USD and the AUD/USD have a clear ly pos it ive relationship because of Gold(see charts below)

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USD/CAD(U.S. dollar / Canadian dollar)

The USD/CAD is the single biggest beneficiary of rising oil prices. Canada which is already the biggest exporter of oilto the US, will experience a boost to its economy when oil price continue to increase. Therefore, if oil rises theCanadian dollar is likely to follow. Over the past years , the correlation between the Canadian dollar and oil prices hasbeen approximately 81%.

Trading Ideas

1) If you believe the price of oil will keep rising, it might be a good strategy to buy the Canadian dollar because it's81% positive correlation to oil over the past years.

2) Since the USD/CAD pair tends to be highly correlated to oil, it might be a good idea to compare both Canadiandollar and oil charts in order to predict future moves, if for example oil breaks above an important resistance level andUSD/CAD didn't break resistance level yet, the USD/CAD is very likely to break above also. This illustrates how oiltends to lead the move ahead of USD/CAD.

The charts below i l lust rate the high correlat ion between the Canadian dol lar and oi l .

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